EU sets world's toughest CO2 emissions cap for cars

After one of the bitterest internal power struggles in recent years, the European Commission on Wednesday finally unveiled a compromise proposal on limiting carbon dioxide emissions from new cars, but many crucial elements remain unclear.

Standing side-by-side on the podium, commissioners Guenter Verheugen (industry) and Stavros Dimas (environment) who for the past weeks have been locked in a tussle over where Brussels' priorities should lie – keeping jobs or fighting climate change – announced a mandatory CO2 emissions cap of 130 grammes/km for new cars by 2012.

This is less ambitious than an earlier proposal by Mr Dimas - which set 120 grammes/km as a cap for car-makers - but the commission tried to sweeten its climbdown in favour of industry by saying that the 120 grammes/km target would still be reached using other measures.

The remaining 10 grammes would come by measures that would not have to be met directly by car makers - such as more efficient air conditioning, the use of biofuels and changes to tyres.

Car emissions currently lie at around 160 grammes/km.

Europe leading the way

Both commissioners stressed the importance of the proposals which will also apply to all cars being imported into Europe.

This is the "most ambitious target anywhere in the world" said Mr Dimas while Mr Verheugen said "we will be leading the field for a very long time."

However, environmentalists believe the commission has sold out to the powerful German car industry which launched a massive counter lobby against the original suggestion which put the full burden of 120 grammes/km solely on car-makers.

Defending himself against accusations that German car-makers were too easily able to bend his ear, Mr Verheugen said it is not the manufacturers of big gas guzzling vehicles - a lot of which are German-made - that will be so strongly affected by the proposals but rather the builders of small and medium-sized cars.

He warned of a "full-blooded attack" from Chinese and Indian cars, who can make the cars to these environmental standards but more cheaply.

Further fight expected

The commission's proposal on Wednesday was just a headline compromise. A further hefty fight is expected to come as the experts begin drafting the law - set to be ready in 2008 at the latest.

Many key details remain unclear, such as who will take the lead on the dossier in the commission - the environment unit or the industry unit - with important implications for the shape of the legislation.

Other questions include whether the law will be staggered, coming into force in stages, whether it will distinguish between big and small cars, forcing larger car makers to shoulder most of the pollution-reducing burden, and whether it will incorporate penalties for misbehaving car manufactuers.

The past weeks have seen a rift between French and Italian car-makers - such as Renault and Fiat - who generally produce smaller more energy efficient vehicles and the German car industry - home to DaimlerChrysler and BMW - with the smaller car producers wanting to ensure German manufacturers also take on their fair share of green measures.

The commission's law will eventually go to member states and parliament for approval, with some MEPs already anticipating the intense lobbying that is expected to come as the proposal moves further along the Brussels legislative pipelines.

"The European Parliament now has the chance to ensure that the German car industry does not act as a brake on EU efforts to combat climate change when it deals with the proposal," said Luxembourg Green MEP Claude Turmes.